Collaboration

Ecosystem Investing: Achieving Impact at Scale

Six lessons from a large-scale, cross-sector initiative to improve education.

In their landmark article Cultivate Your Ecosystem, authors Paul Bloom and the late Gregory Dees highlight the interrelation of partners in creating social change, noting, “[S]ocial entrepreneurs must understand and often alter the social system that creates and sustains the problems in the first place. This social system includes all of the actors—the friends, foes, competitors, and even the innocent bystanders—party to the problem, as well as the larger environment—the laws, policies, social norms, demographic trends, and cultural institutions—within which the actors play.” As the company Target approaches its goal of investing $1 billion in education, it is putting a strong and growing emphasis on strategic investments in work that the social sector can scale and sustain. And like many investors, it is beginning to fully understand that scaling means understanding and respecting the complex interplay of partners that Bloom and Dees—and many others since—identified. 

In 2013, Target invested $1 million in United Way Worldwide and the education nonprofit StriveTogether. Our goal was to test a model for achieving results at scale. We leveraged Target’s resources, StriveTogether’s results-driven methodology, and the United Way’s massive geographic footprint. We did this by convening a cohort of seven United Ways to function as collective impact “backbone” (partnership-coordinating) entities and equipping them with the StriveTogether methodology. 

One critical insight we’ve gleaned from our work is that funders seeking impact at scale must view their work within the context of a broader ecosystem and adjust their behavior in response to change within that system. This insight builds on the framework Bloom and Dees provided, which describes players and environmental conditions in which an organization operates. We call this idea ecosystem investing, and it is inherently more complex, requires a different set of assumptions, and produces different results than traditional programmatic investing. The following differences emerged during our pilot. 

  • Ecosystem investing requires funders to transition to a new set of behaviors and assumptions. (Image by Jeff Edmondson)

    Transactional vs. transformational: Program investments are typically linear, often hierarchical relationships between funders and nonprofits. The dynamic is similar to a client (funder) purchasing services from a provider (nonprofit). By contrast, ecosystem investors consider transforming the way they operate just as they may expect a practitioner to shift the way they are delivering services. As an example, we have seen United Ways that are shifting their grantmaking process from a focus on individual programs to networks of practitioners working on a common outcome. They are transforming the way they do business to achieve better results at scale.

  • Answers vs. understanding: Program investment is a bet placed on a known answer. For example, a funder may see a successful program in one community and import it into another. Ecosystem investors meanwhile identify a process to help understand the conditions for change. Many United Ways, for example, have invested in a process for engaging community members to identify and scale local practices that are having impact. 

  • Isolation vs. interrelation: Program investing often involves an individual funder working with a single nonprofit to achieve a desired result, while ecosystem investing requires that investors understand and engage the complex interplay of partners and variables to move a specific outcome. Ecosystem investors work together with practitioners and other stakeholders to create conditions and solutions that achieve concrete outcomes. In our pilot, some United Way staff had to clarify in meetings that they were not there as a traditional funder but as a committed partner working to engage over the long-term to make improvements. 

  • Narrow and predictable vs. scaled and unpredictable: Programs often attempt to address a very specific and definable problem with a narrow and targeted intervention. As programs improve, their results become more predictable for the specific population they target. Ecosystem investing, on the other hand, yields unpredictable results precisely because it operates within a dynamic environment. A proposed solution might result in an unexpected set of stakeholders engaging more deeply, and emerging as critical champions or challengers. For instance, one United Way focused on kindergarten readiness ended up supporting a group of Hispanic mothers who emerged as the best emissaries for training their peers in promising practices related to early literacy.

  • Individual vs. collective: Small groups of organized individuals with highly aligned objectives can drive programs. Ecosystems require a host of partners—each of which brings its own set of priorities—and are constantly re-establishing equilibrium and redefining roles. We saw United Ways model this behavior by engaging relevant community partners, and then making adjustments to their own approach and priorities to ensure advancement of collective goals.

  • Immediate vs. sustained: Programmatic investors often seek to deliver results in a direct and time-limited manner. Ecosystem investors push for the achievement of specific goals against a timeline, but recognize the need for and support infrastructure to sustain impact over the long-term. As an example, rather than jumping immediately into new activities, one United Way initially worked with partners on a data collection method that would help them form an authentic understanding of what would lead to improved outcomes. 

In our pilot, all seven partners made significant, measureable progress building the civic infrastructure required to drive population-level outcomes for student achievement at scale.  This success was the result of funders actively modeling the behaviors above. All of those engaged in this work will tell you it is a heavy lift and a long-term proposition. Our experience is that ecosystem investing holds incredible promise for addressing our most complex social challenges. 

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COMMENTS

  • Leslie Maloney's avatar

    BY Leslie Maloney

    ON September 1, 2015 06:28 AM

    As a relatively new funder in the philanthropic space that has had to define from scratch its investment strategies, this concept resonates particularly well for us. We deliberately chose NOT to establish a formal application process because we wanted to seek out opportunities ourselves by understanding the nature of the work, developing relationships with all parties involved and then identifying ways to plug in—and not just with funding, but with time and talent as well. I oversee our education investments, and came across the StrivePartnership in Cincinnati, the first of now over 60 Strive communities that seek to move education outcomes through collective impact, shortly after we formed. What intrigued me the most about this work was its holistic approach—it was about aligning a program-rich environment around a set of shared goals to achieve systemic change and improved outcomes. I jumped in with both feet, somehow knowing this work was revolutionary and believing we could achieve impact at scale, while not realizing at the time that I was, in fact, embracing this concept of ecosystem investing. To me, true collective impact coupled with ecosystem investing will be the key to making inroads with our most glaring social challenges today. And for many in the philanthropic sector, ecosystem investing will require paradigm shifts in their thinking. I am thankful we chose this path from the beginning.

  • BY Nelson T. Enojo

    ON September 2, 2015 12:18 AM

    Why is it so difficult to attract local collaboration when policies are already given?  Why is it to difficult to sell concept for inter-sector partnership?  Maybe, it is already hardwired in our culture (Philippines) that funds first before plans.  And, we all now that planning consumes the greater amount of funds.  How can philanthropy help change this?  While governments are best suited for public service, but maybe another model for effective aid to really reach the communities must also be considered.  Performance based approached is a promising concept for an effective cooperation.  Thank you. And, working to advocate this first:  http://www.slideshare.net/nelsontenojo/environmental-education-key-to-advancing-sustainability-in-the-future.

  • BY Marilyn Darling

    ON September 3, 2015 04:27 AM

    Naming the shift that’s needed—from narrow and predictable investments to ecosystem investing—is an important way to help everyone in the ecosystem see what they, themselves, need to do. This is a great description of how our roles need to change in order to be able to create the kind of impact we aspire to in an environment that refuses to hold still long enough for replicable interventions to work.

  • Tina Murphy's avatar

    BY Tina Murphy

    ON September 8, 2015 07:18 AM

    Not all the people understand the necessity of environmental protection, especially when it comes to their money. Ecosystem investments are developing and now is the time for changes. I completed my research on this together with http://www.trustessays.com/dissertation-writing-help , it was great work. I will publish my dissertation later. A lot of my friends deny the concept of ecosystem investing and find this point an ineffective cooperation. Opinions of people depend on the published material.

  • BY Paul Shoemaker

    ON September 11, 2015 08:32 AM

    I know I am preachin’ to the choir, but this is the kind of real life real story we need to get out there in the world more and more. Great piece, y’all

  • Kathy Merchant's avatar

    BY Kathy Merchant

    ON September 15, 2015 10:24 AM

    Over the period of 18 years that I served as CEO of The Greater Cincinnati Foundation (GCF), we evolved our thinking in both grantmaking and impact investing to a point of complete alignment with the points made so well by Jeff, Kate and Stacey in this article. When the term “collective impact” was coined in 2011, in large part based on the excellent work in Cincinnati to develop what is now known as the StriveTogether network, we realized that over a period of more than a decade we had helped to create six “backbone” organizations serving our community as catalysts for change across multiple sectors. That insight led us to create a five-year initiative, starting with this initial cohort of six backbones (including Cincinnati’s StrivePartnership) in 2012. The initiative included unrestricted core operating support, technical assistance, a peer “community of practice,” and rigorous evaluation where key elements included influence, leverage, systems change and stakeholder perceptions of value. The number of backbones has since increased to ten, and because of its success (including varying degrees of positive community-level outcomes), the initiative will likely extend beyond the original five-year scope.

    As I have now transitioned from leading a community foundation to working with StriveTogether as a senior fellow and with foundations on strategic philanthropy, it is my wish and hope for the future of our communities that more foundations will see and act upon the wisdom of the approach articulated in this excellent article.

  • BY Jonathan Zaff

    ON September 20, 2015 11:43 AM

    I want to focus on one angle of the many important angles that Edmondson, Mohan and Stewart raise in their piece… asking before acting. With a big push over the past several years toward evidence-based programs (and policies), what has been lost is whether the program is aligned with the actual needs and desires of the community and whether the program’s evidence was found in communities similar to the ones deciding to implement the program. As my colleagues (Emily Lin from nFocus and Amy Gerstein from the Gardner Center at Stanford) and I recently argued (http://authors.elsevier.com/a/1RkgCh~JIGjcY), “data leadership” is needed. The effective leader will be one who is embedded in the work of the community, is able to build trusting relationships with and among members of the comprehensive community initiative, and can work collaboratively with community leaders and constituents to figure out which programs are needed within the broader ecology. As we state, “That is, what types of evidence would actually a) be read and used to influence CCI strategies and actions, and b) yield, through their use, more effective operation and achievement of CCI goals, outcomes, and impacts?” As Edmondson, Mohan and Steward suggest, CCIs need to be in this for the long haul and they need to continually reflect on what will be the most effective strategies within the context of their own community.

  • julia dave's avatar

    BY julia dave

    ON October 14, 2015 05:10 AM

    We deliberately chose NOT to establish a formal application process because we wanted to seek out opportunities ourselves by understanding the nature of the work, developing relationships with all parties involved and then identifying ways to plug in—and not just with funding, but with time and talent as well. I oversee our education investments, and came across the StrivePartnership in Cincinnati, the first of now over 60 Strive communities that seek to move education outcomes through collective impact, shortly after we formed writing help uk

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